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Questions tagged [macroeconomics]

Macroeconomics is a branch of economics dealing with the aggregate economy as a whole, rather than individual markets.

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9 views

why data for PPP conversion rates are given annually?

i try to find quarterly ppp rates for currencies to compare actual exchange rates from PPP levels, but all of data is annual? why?
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Log linearising (Gali textbook)

In Gali (2015)'s textbook Monetary Policy, Inflation, and the Business Cycle, variables in levels are denoted with capital letters, logged variables with lowercase letters. However, when a log-...
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What are some similarities and differences between the 2001 recession and the 2007 recession in terms of causes and the effects on the economy? [closed]

I know the two were caused by the burst bubbles and worsened by rising interest rates. I also know that the the 2001 recession had a long jobless recovery but did not experience as many bank failures ...
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13 views

How does investment lead to generation of jobs?

I quote from India's Economic Survey 2019 (an official document) - While the claim is often made that investment displaces jobs, this remains true only when viewed within the silo of a specific ...
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3answers
52 views

Does investment directly influence demand?

I quote from the first page of India's Economic Survey 2019 (an official document) - Investment, especially private investment, is the “key driver” that drives demand, creates capacity, ...
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1answer
88 views

Why is macroeconomics studied through “Shocks”?

"Why is modern macroeconomics all about identifying this shock and that shock?" Coming from a theoretical econometrics background, I have recently delved into empirical macro literature. I am a bit ...
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19 views

How the Balassa-Samuelson affect real exchange rate?

According to standard Balassa-Samuelson effect, when the productivity increases in the tradable sector (GDP), price increase can be observed in non-tradable sector and this can lead to appreciation of ...
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1answer
40 views

CES v. Leontief Aggregator in Production

Consider a production process with two distinct capital types such that there is a capital aggregator. You could view $k_v$ as a more versatile capital (e.g. can be converted into many different ...
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22 views

When Balassa-Samuelson effect increases, real exchange rate depreciate?

I researched several literatures related with Balassa-Samuelson effect and according to literatures, as Balassa samuelson effect increases, real exchange rate appreciates. However according to the ...
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11 views

If PPP Exchange rate is 0.291, what does that mean?

I've normalised deflators for countries A and B. If the Price level of Country A/ Price level of country B = .291, does that mean that on average for every dollar a person in Country B spends, for the ...
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26 views

How to calculate PPP Exchange Rate using GDP deflator?

I'm doing a project and I'm asked to find Purchasing Power Parity exchange rate. The way the teacher says to do it is to divide my countries GDP deflator by the US GDP deflator over a time series. Is ...
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1answer
37 views

Having a lower inflation rate is not the same as having lower overall prices?

Having a lower inflation rate is not the same as having lower overall prices.Why? lower CPI(inflation) means price levels in country decreases?
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1answer
17 views

If I find the GDP deflator (i.e., price level) for a given time series, can I then find real consumption given nominal consumption?

I've found the gdp deflator for a country over a 25 year span. If I have nominal consumption for the same time series, then I just have to divide nominal consumption by the p-level I found with the ...
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18 views

Does anyone know how to find disposable income data? [duplicate]

I'm doing a macro project and I need to find disposable income data over a 25 year period. My professor said that this metric data is available directly on the World Bank website. I've searched ...
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25 views

How to Find Real Disposable Income for Iran?

I'm doing a project for my macro course, and I'm trying to find real disposable income for Iran over a 25 year period. In my course Disposable income, $Y_d = Y - T$, where $Y$ is output (income) and $...
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2answers
46 views

How to deal with misspecification of models in Macroeconomics?

I'm wondering what methods are used in economics, specially in macro, to deal with model misspecification. I've already searched the web, but I may be missing some methods. Therefore, I ask you for ...
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1answer
102 views

Could a “Japanese-style strike” work as it's supposed to? Under what conditions?

This is an urban legend, mostly believed in Spain and some countries in South America. The legend is based on the premise that their way to make a strike would be to work much more than usual in some ...
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1answer
36 views

Would it be accurate to say that the economies of most of the countries are capitalistic?

What is the proportion of countries that are capitalistic? What is the proportion of the planet's population who live in such countries? How is this, (somewhat subjective?)
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The rationale for using a lagged variable to address endogeneity arising from simultaneous causation?

when there is simultaneous causation between dependent and independent variables often in papers we see a lagged variable being used in place of contemporaneous variable. For example, Clemens, ...
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1answer
24 views

Market Clearing with Dividend and Investment

In pure exchange GE models, a typical goods market clearing condition for good $n$ looks like: $$\sum\limits_{i=1}^Ic_n^i=\sum\limits_{i=1}^Ie_n^i.$$ Consider a model with production where firms can ...
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42 views

If an endogenous explanatory variable is serially correlated does it mean that its lags are also endogenous?

in panel data when examining economic growth determinants lags are often used to account for endogeneity of explanatory variables. However if the explanatory variable is serially correlated, does it ...
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1answer
56 views

What is the interpration of results if adding or subtracting a control variable effects the significance of explanotary variables?

I am conducting some regressions on economic growth determinants and I am disillusioned. Essentially by choosing what groups of variable to regress I can get the desired significance. What does this ...
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30 views

how Ballassa Samuelson affects real exchange rate? [duplicate]

I get confused. How "Balassa Samuelson effect" influences real exchange rate?
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1answer
33 views

Meaning of assumptions regarding continuum of agents in economics models

I am reading an economics paper which contains a model with households and banks. In the model, banks are owned by households. The authors make this assumption when they discuss households (section 2....
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1answer
48 views

rental cost of capital

I am estimating time series for rental price of capital using Hall-Jorgenson method: $$r=\frac{P_k}{P}(i-inf+\delta)$$ here, $r$ is the rental cost of capital, $P_k$ is the price of capital goods (...
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26 views

Proving the existence of a steady state

I am trying to prove the existence of at least one stable steady state in a situation where I am given properties of the production function but not an explicit functional form. I have the following (...
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1answer
30 views

US Real GDP Growth Rate

I am interested in finding the quarterly real GDP growth rate of US and have found the following two measures from IMF International Financial Statistics: Which one should I choose (Dark Green or ...
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1answer
15 views

Each short-run average cost curve

Each short-run average cost curve A. never touches the long-run curve B. always crosses the long-run curve C. always lies above all the points on the long-run curve D. coincides with the long-run ...
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1answer
15 views

Is it reasonable, in panel data, to use past values of explanatory variables as instruments to deal with simultaneous causality?

I am trying to examine the determinants of economic growth, essentially regressing a number of variables upon economic growth. I face a problem that there is likely simultaneous causality between many ...
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3answers
184 views

Is poverty a mathematical necessity?

I recently saw a meme, and the content was something like: In the near future, a meteor will 'hit' the Earth, and there will be gold rain, and hence everyone will be rich The ridiculous thing ...
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2answers
102 views

Is it possible, that the global warming will affect the growth of the economy?

I am wondering if, in the face of the global warming, the long-term passive investments into ETFs are still a good idea. Right know we benefit from the growth of the economy. I assume (maybe that's ...
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1answer
43 views

Why has gold dropped during the same week as Deutches Bank faces great difficulties

I chose the phrasing "great difficulties" to be polite. The "capital release unit" seems to be a bit of a desperate action from the bank, coupled with further complications involving bad press made ...
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18 views

Are there examples of Cost Benefit Analysis using diminishing marginal utility of income?

In Cost Benefit Analysis (CBA) constant Marginal Utility of Income (MUI) is usually assumed. This implies that a dollar received/earned is the same at low and high levels of income. In Social CBA, ...
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1answer
82 views

why pound is more overvalued than euro and usd?

Why British pound is more overvalued than euro and usd, even though these currencies(euro and usd dollar) are more traded than British pound?
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1answer
90 views

What are some applications of Real Analysis in Graduate Economics?

I am interested as to what areas of masters/PhD coursework that learning the fundamentals of Real Analysis would be beneficial for? I am aware of its applications in Econometrics proofs and analysis, ...
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1answer
31 views

How to calculate the spending multiplier from a given set of equations?

So i have this question: I go along and get Then i need to calculate the effect on the optimal output is G increases by 80: And on the answer sheet it states that the spending multiplier is: From ...
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1answer
83 views

How much better off would the average person be if we took away enough money from the top 1% to make them no richer than the average person?

In my hypothetical situation, the USA population takes enough money away from the top 1% so that they are no richer than the average person. That money is then redistributed to the lower and middle ...
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1answer
40 views

Why did no US politician start the trade war a decade earlier with China or possibly the Globe if it is a good thing to do? [closed]

Why did no US politician start the trade war with China (or possibly the Globe) a decade earlier if it is a good thing to do? I am asking for a list of reasons for why not.
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2answers
51 views

How does real gdp affect the domestic currency?

When the domestic real gdp per capita increases then it has a negative effect on domestic currency (depreciation)? Why? Source: The real exchange rate of euro and Greek economic growth, Gregory T. ...
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20 views

What is a monetary policy shock?

I am trying to understand some basic stuff about New Keynesian models and monetary policy. Despite that almost every single paper on monetary policy talks about monetary policy shocks, I still don’t ...
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13 views

Does climate and resources explain nearly all variance in gdp

Is there any value to institutional explanations. Or is institutionalism made up.
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1answer
23 views

How to determine the cost of a good

Can the cost of any good be determined based on its ratio to a minimum wage? For instance, if 10 years ago, eggs cost \$2 / dozen and the minimum wage is \$10 / hr (eggs cost 20% of the minimum wage) ...
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1answer
25 views

Manipulating index numbers

I have a producer price index which is the composite of 9 various commodity prices including that of coal. I want to remove the effects of coal price changes from the original index. I have data on ...
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1answer
40 views

Do patents foster innovation?

I'm looking for a good meta analysis which answers the question if patents are generally beneficial to economy or not. Some papers I've read claim they are indispensable, other say it depends on the ...
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3answers
61 views

How can a consumer economy possibly be sustainable?

Some consumer economies In 2017, the United States household final consumption expenditure (HFCE) is $13t, which is 68% of its GDP. In 2017, the United Kingdom has a HFCE of 1.7t, which is 66% of its ...
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1answer
19 views

Data of Inflation and unemployment for a Panel Data

I am looking for data of Inflation and unemployment to run a Panel Data of a Philips Curve. Can anybody help me with some website/source that I can find data like these? In my mind I would need too ...
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2answers
63 views

Confused about what is meant by adjusting for inflation

In class, we have been using this calculator in order to see the effects of inflation. https://www.rbnz.govt.nz/monetary-policy/inflation-calculator I am slightly confused by what is meant by "...
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15 views

Diligent, wise bona fide voters

Can a diligent, wise and bona fide voter choose procyclical policies? I am asking if there is any explanation. In diligent and wise I mean people who appreciate the Ponzi scheme, want to balance ...
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1answer
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A decrease in the cost of borrowing (interest rate) will case

A decrease in the cost of borrowing (interest rate) will case a) the demand for loanable funds to increase. b) the supply of loanable funds to decrease. c) both A and B. d) either A or B, but not both....